Module 5 Test Review - Economics - 7th Grade

Why is a profit motive important in many economies?

• people would not use coupons without it

• businesses could not advertise without it

• businesses could not set prices without it

• people would not start businesses without it

Which word is "raw materials needed to produce growth"?

• capital

• labor

• natural resources

• financial capital

Which word is "money that a business uses to buy the items needed for the business to function"?

• capital

• natural resources

• labor

• financial capital

Which word is "human time, effort, skills, and talent needed to produce goods"?

• labor

• capital

• natural resources

• financial capital

Which word is "items such as tools, machines, factories, and office equipment needed for a business to function"?

• financial capital

• capital

• labor

• natural resources

Which of the following scenarios accurately illustrates the concept of economic interdependence?

• an entrepreneur decides to open a bakery and produces bread for his neighborhood

• good rainfall allows a farmer to produce more strawberries and he chooses to expand his business

• Japan lacks iron to make steel, so Japan enters into a trading relationship with Australia and Brazil, who supply Japan with iron ore

• South Africa is rich in diamonds, gold, and mineral resources, so South Africa creates a mining industry that produces much wealth

Which country has a capitalist economy?

• China

• Sweden

• Taiwan

Which country has a communist economy?

• Taiwan

• Sweden

• China

Which country has a socialist economy?

• Sweden

• Taiwan

• China

Why must governments ensure that corporate taxes are not too high?

• public services will suffer

• businesses will not make a profit

• the government cannot invest in education

• the government cannot invest in national defense